Schneider Electric S.E. (EPA:SU)
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Investor Update

Sep 26, 2019

Speaker 1

Hello, and welcome to everybody. Good morning, good afternoon. Really appreciate. You're taking the time to spend with us with us today. So of course, in Schneider, in the Investor Relations, as some of you are aware, we are focused on ensuring regular interaction with our investors.

We've tried to keep it actually quarterly. And sort of keeping that in mind, we also decide that we want to talk about a topic which is very integral to our company inherently, which is on the area of sustainability. ESG more broadly and the generic term for it. So with that, we had last year kicked off a similar call, just with the basis of trying to share what the company has been doing. I think some of you were on the call as well.

We also instituted a semiannual newsletter where we are updating on progress as we are we're making to stay as transparent as we can. And we plan to keep this going. So the purpose really of this call is to, first of all, familiarize yourselves with how Schneider is approaching this topic. Very important topic and what is the framework we use, what are the commitments that we've taken as a company. And you will notice in a few minutes that there are several elements to the framework.

Obviously, we cannot cover all of them in one call today. So as we've done last time, we will probably cover a couple of topics today and then we will keep the rest for future interactions. I would also sort of like to point out that we already are sort of quite proud that we are amongst the ESG Index leaders. This was the ranking that Ipreo had been publishing and representing sort of what what we've been doing within the company and what we've been doing for our partners and our customers as well. So, but before I sort of start, I just want to take a minute to, to refer you to one slide, which is slide number 3 over here.

I think some of you have, I've seen this slide before, but to me, this slide really encapsulates what Schneider Electric is and does. So, if I were to just sort of run you through the slide, you would see that we have 2 businesses to Synergetic businesses here, which is Energy Management And Industrial Automation. And each of the two businesses is sort of linked to one important mega trend transformation, which is upon us today, which is to which is set to drive growth in the coming years. So for energy management, as we know, it is the megatrend is around energy transition, the overall transition from fossil fuels to renewables, a world which is obviously getting more electric in the coming years with a higher share of electricity and decarbonated energy. So that's really sort of the 1st, like the 1st business.

And then if you look at industrial automation, the second business that we have, that's linked to everything to do with the industry of the future or industry 4.0 as the slide shows is all about the industrial internet of things, the ability to drive more digitization in order to get more value from the industries. So in both of the cases, for both of the businesses, the basic premise or the value that we are able generate for our customers is essentially efficiency. And it's a combination when you combine the 2 businesses and the technologies, is between energy efficiency and process efficiency. So effectively, ultimately helping to meet the sustainability goals of our customers. So I just wanted to make sure that you have this in your mind.

So even though it's in the coming, in the coming minutes, we will talk about what our own targets as a company on sustainability, on carbon, on other areas. But please keep in mind that our entire business model in general is geared towards supporting efficiency and sustainability for our customers. And we have lots of customers as So, with that backdrop, I'd just like to introduce the speakers for today that we have set up. And, we have three speakers, to bring us through some of the topics today. We have, Frederick, who is part of our sustainability team and he is going to introduce the structure of our framework and explain we how we've set it up and what are the targets that we have.

We have Xavier who, amongst his other responsibilities in the company is also leading the effort on environment. So, so he is responsible to speak today on topics, which are linked to CO2, to climate, to Circular Economy, a very, very interesting elements and integral to our strategy. And then we've also today included Tina Milon, who is, our head of talent with a specific focus on a topic, which is diversity and inclusion, which which we think is inextricably linked with what we're talking about today. We have some good, progress and initiatives and thought process which we think distinguishes us from others in our industry and in general. So that's really the structure for the day.

We, of course, will have some time for questions and as we move ahead. So with that, let me just pass on the call to Frederick to kick it off. Thank you.

Speaker 2

Thank you, Amit, and good day to everyone on the call. So I'm just going to start, talking about what we call the energy products. To express how Schneider Electric can uniquely position its business with key challenges of this century. You probably have seen this slide before I think it's useful to remind everyone that there are today more than 1,000,000,000 people in the world that have no access to electricity. And in Europe, 63,000,000 people living in Truefathered in Europe.

And these people are currently excluded from growth, from progress. And it can't keep going like this. In the same time, energy demand is growing, It's a strong driver for growth everywhere. And we've seen all the ICTC reports. We need to drastically decrease our CO2 emissions we need to act now for clients and are very, very strong, messages from the society, from the youth, from our clients, from oil ecosystem, the demand that Tier 2 emissions are decreasing.

So solving the energy products means bringing the solutions to reconcile these 2 aspects of people needing to have an access to clean Renewable and affordable energy, and in the same time, decreasing carbon emissions for this energy. And we have, I mean, mentioned this already, but, the vision, the solutions to these products, the work that the more electric more decentralized, more decarbonized and more digital. And so once we have this vision, it's clear that, for standard history, with our services on energy management, industrial automation, and all the activities we have to provide access to electricity to people in the world, we are strategically positioned to answer this challenge. We ended this into our culture and values, particularly through our principles of responsibility, which we've updated recently in 2019, and there is aspects of sustainability from the environment and to ethics diversity and so on. We share best practices and we engage with our ecosystem, meaning our customers, the public, the Jewish society of suppliers and so on.

And having constantly So turning it into everything we do, it's allowing us to, well, have a competitive advantage. First, anticipate the changes of these words, that change for a company that's close to two hundred years old. And be able to bring innovative solutions and answer the needs of our customers. And that leads us to the next slide, which is what we call lighted on, as standard as frequent, we empower all to make the most of their energy and resources entering license everywhere for everyone at every moment, which again is about an ecosystem standardly trick and embarking this ecosystem in the sustainability journey. And through our energy and automation, digital solution for efficiency and sustainability, we bring an answer to this needs and these challenges.

So how do we drive transformation for ourselves, for our care system? It's not new. For 15 years, we've had a tool the dashboards, a program that was previously called the Planet And Society barometer and now the Schneider sustainability impact And this is a program that truly, embarks our food ecosystem, all our employees and the over performance of these programs, including the various variable compensation for more than 50,000 employees around the world, which is unseen, in the landscape. We've articulated the program for the current one around 5 megatrends, which we've identified with our monetary IT metrics, consulting internal and external stakeholders, And that's very important because what we you will see after all the programs of the SSI, it's not exhaustive of everything we do at Schneider, but it gives highlights, let's say, on priority action plans to transform our business what we do with our customers with suppliers on these five topics that are climate, Circular Economy, Health And Equity ethics and development. So when we talk about the center ecosystem, yes, the customers is, for example, how we demonstrate how many CO2 savings we bring to our customers with our offers.

It's our employees, with demonstrating how we fund our global family resources, our suppliers, how we embark our suppliers to be more sustainable, communities, how do we train, people and the privileged people to energy management jobs. And we do that from R&D to enterprise, through our eco design way green premium and security offers. We are fully transparent, with these results and programs, we publish them quarterly together with financial results by our CEO, our CFO, and each program is audited annually by an external third party. So we're going through here really a very strong, robust and transparent lease of programs that aim and always improving on sustainability for the group because, you know, being more, you can always be more sustainable. It's a it's a journey.

It's not an end. So we always need to find new things to do. So here on this slide, you can see the list of the programs that we have in place in the standard to 10 meter impact linked to several sustainable development goals. And I won't go into the details of each and every one of these indicators. But just to highlight a few and also say that end of 2018, the performance of the whole parameter was really good.

So we decided to increase the ambition of 9 of these indicators to demonstrate that Schneider Electric always pushes its limits beyond and always goes further in sustainability. For example, just wanted to have a quick comment on the supplier audits under human rights and environment visions, which is part of our duty of agents plan. We planned last year when we started the program supported 300 suppliers. We increased the objective was $350,000,000 and over the $196,000,000 where, audited in Q2 2019. On the sales procurement and finance and price train every year on anticorruption, you might need to price by the 14% performance is closed.

In fact, this is because we have, updated the program, which previously targeted, people in the company from sale procurement finance and we've changed the way we identify let's say, at risk job codes. And that meant that we extended actually the population doubled In fact, but the target is that by theendoftheyear and every year, these employees are trained on anticorruption. And finally, on development, regarding the turnover of our access to energy program, which is again an important part of our sustainability Johnny that goes beyond, let's say, we're, it's a classic voters company and suppliers operations and clients But, the progress was previewed and efficient driven by sales of SIR Home System in Southeast Asia, and West Africa with sales of teaching materials within the framework of a project as for women and entrepreneurship in marine and work energies which over the next 3 years, should support close to 5000 small and medium sized women's businesses. And so just wanted to give you a few insights in some of the indicators, but more than happy, of course, to to deep dive in in more if you have any more questions. Now I've expressed how we've principally said the course everything we do well, we're not the only ones saying that this is the case.

We're also externally recognized for our sustainability performance by various ratings and indices, from all geographies and various recognitions and various topics from gender equality to ethics and sustainability at large or climate change in particular. And we've made, public and strong and ambitious and bold commitments, on also various topics. On the next slide, So you can see how we don't want to only disclose very long term target. And not only very short term KPIs, but we need to demonstrate that. We have a long term vision, which also midterm goals, and short term transformation plans aligned with that vision.

So I've talked about the 2020 target with the Schneider sustainability impact which is well on its way to meet its objectives. In 2025, we also have a couple of milestones on training on providing access to energy on supporting entrepreneurship and on asset fixed as well. By 2030, we made number of commitments, and especially to contribute to the best we can to the sustainable development goals. Which we recognize as the new common grammar for sustainability that all need to embrace also in order to bring more clarity, to our partners and what we do for sustainability. By 2050, really our let's say vision, which is more our, within our values, which is, partnership and the culture of engaging always the ecosystem not only for all sales, but, yeah, embarking everyone into our journey.

And I lead the floor to Xavier who will complete this journey with more specifically our new client engagements.

Speaker 3

Thank you, Frederic, and hi everyone. So I'll be walking you through, the same chart where I will be positioning our CEO's latest commitment as early as this week in New York Climate Week. So Jean Pascal Stiqueois confirmed the acceleration, which as a company we are taking on commitments. If you look at the bottom part of the slide on 2025, What we've announced earlier this week is to prepone by 5 years, advance by 5 years, to be carbon neutral in our ecosystem. What does that mean in concrete terms?

That means from the mine where the results are extracted done to our customers and the end of life of our solutions, we are building a carbon neutral ecosystem all in all. That means there are admissions through the operations, through the resources we use, which are, counterbalanced by the factor through the tons of CO2, which are avoided on our customers' buildings, industries, grid I'll give you a bit more data later in my presentation. Another commitment which was confirmed and made bolder is on 23rd we made the commitment to be net 0 in our operations. And we firmed up, we gave substance to the science based targets commitments, which we announced sometime back. And we are one of the 87 companies, which worldwide have decided to commit to plus 1+5 degrees trajectory.

And not only for us, it's a proud moment to be one of those companies pioneering committing to invent a really severely decarbonized operations, but also it's a business opportunity for us. As you can imagine, we are seeing ourselves as an equipment vendor as a solution to enabling the 86 other companies to succeed in that journey. And in 2050, we made that commitment more explicit as well. We really aspire to a net 0 CO2 supply chain means with our supplier and us, we are willing to be net 0. Of course, technologies have to come up we need to have a net 0 logistics.

We have to have better materials recycled circuit. We need to invent ways of making it happen. So in 30 years, from now, we have to work hard. It has started. I will share with you in a second in the next slide how we start to engage with our suppliers, how we started to to come closer to that ambition.

So now I want to give you a bit more substance in the next two slides about what we do internally for ourselves. And then what we do with our suppliers and what we do with our customers. So the next slide is very much giving you on the right side of the slide, what we do for ourselves, for ourselves, in our operations, we have taken commitments One of them is RE100, meaning we are committed to have 100% of our electricity, which is renewable by 2030. And as you may have seen the progress, we are well at par, well on track with 45% currently. So that's an exercise where not only we buy green electricity when available, but most importantly, we implement microgrids, we implement our own solutions, e cost structure in our own sites, factories and offices to to leverage our own technologies for that ambition.

We have a full strategy country by country for our approximately 1000 sites globally. And we are confident this is a journey we're going to execute as per the plan. Another commitment we've been taking is about energy productivity to half, to improve the productivity of energy we use meaning energy efficiency at work. And as of today, since 2000 and 5, we've been able to more than gained 54% of energy efficiency. And we are targeting 100% meaning to double energy efficiency, which is to decoupled by a factor of 2 our operations and energy intake.

And again, we are well on track on this parameter. I'm very proud to announce the next the topic, which is a 13 net 0 carbon buildings. We're going to release our next week public unveil of this. Where 13 of our sites be there factories, distribution centers or offices are already today operating as a carbon neutral pace. And we are going to be having more of those sites.

Again, as I said earlier, leveraging energy efficiency, our software, edge and our AR gear to make it happen. Another thing you see at the bottom of this slide is small fact has been a program. I'm sure Murata moved and Ahmed Balan was to have introduced that to you, some of you already. Quite proud to have out of the World Economic Forum list of light out of the future factories, 3 of our factories, in China, France, and Indonesia are already part of the league of the top factories in the world, showcasing technology to digitize energy management to be neutral. And we have green factories in China.

Actually, we have 7 factories in China with strategy, which is some of our industry ministry. 7 of those is quite compelling and the number is growing. We had 4 additional this year. So that make us proud. So that's for our own footprint.

If you look at the last part of the slide, we work, of course, with our supplier. It starts with designing new offers, which are less resource intensive. I do see a picture here. It's one of our contact contactors where we've been able to use less resources whilst improving performance, reducing emissions of the product. And eco design is really culture we've embedded in 100 percent of our projects in Schneider Electric.

We co innovate with suppliers earlier this year in July I was in Dusseldorf in a BASF conference unveiling a partnership we have on recycled polyamide. We are making good progress in assuring, assessing different resources, recycled plastics, bio sourced post consumer, polycarbonates, polyamide and others to for our products and for our packaging to have lower impact resources. Bottom next, you see our partnerships with a major logistics vendor, CUNA Nagel, where we've done 2 things. The first thing is we've Through their expertise and ours together, we have now a software platform, a cloud based platform where all of our legs of transportation are captured and CO2 calculations are done in a very efficient manner, which allow us to better understand, first where the impact lies. But also what we use now with that same tool is to have a modeling ability where we place a price to carbon, we've taken 2 prices today per ton at short term and 100 years per term in the midterm to gauge the impact of a price to carbon in our modeling and transportation decisions.

That's for us and our supplier. I want to spend a bit more time and close on this dimension, which is very core to what we do, which is how we have our own customers to likewise succeed in the journey of decarbonization. You may see the way we add value to our customers in that the area of those 3 green boxes ecostructure, this is very much the overarching umbrella, which encapsulates our technology, which I think trunk, many of you have already been exposed to energy and sustainability services, which are armed consulting, armed on energy strategy, energy procurement, sustainability consulting, Renewable Electricity Advisory, which is also a great arm, a great support of great great on a great contributor of Schneider's contribution to their customers. And Exchange, which is our platform where we bring the ecosystem together. Ourselves, specialized developers incubated, incubated joint ventures, incubated start ups, to find a way in an open ecosystem to add more value to customers in the build space, in the industrial space, and we make a lot of progress in that game.

So you see at the bottom left, an example of a customer's implementation would make us proud. This is Finland's largest industrial macro grid with Lidl, the retailer whereby the entire asset runs on renewable electricity. It's powered by 16,000 TV panels. It's fully enabled by Schneider Electric Microgrid. It's for us to showcase and for the customer, it's a very successful asset.

It's highly in Asia efficient, 70% more than the previous equivalent, which they had. You have seen as well on this side this number of 51,000,000 tons of CO2 We had a call in a similar forums, a month ago where we've unveiled the way we calculate how much our technologies help our customers avoid CO2 to be admitted in the atmosphere. In 2 words, this is a very conservative methodology, which only accounts for those very, very, very certain CO2 tons, which are avoided on brownfield, meaning retrofit projects where a building, an industry, a data center would emit less than they were emitting in the past. So that's really 51,000,000 tons of CO2, which we're not releasing the atmosphere in 2018, which otherwise would have been limited. So it is really hard contribution to decarbonization of artistry.

And on the right to conclude, we have different business models, which we call Circular business model. Which are growing where you see 3 examples extending life of assets, modernization, which we call ecofit, which is to prolong the life of assets from 20 to 30 years, connecting the assets, adding more value through services, connecting the assets once they retrofitted. We have refurbishment. We have factories around the globe where here we see the UPS and interactive power supply which is being taken back and brought back into a second life and brought back into the market in our own factories with all standard quality and certifications. And on the right, It's handling end of life.

Here you see a forward transformer, but we have end of life services for other range of products. The value of those services is to make our customers enjoy a longer lifespan, get a better cost of ownership. For us, it's also a way to remain in touch with our customers life. It's really much conducive to intimacy to what we call stickiness. It's to never let the customer go and to be adding value to them throughout the lifespan of their project, of their assets, so adding them more value in a more sustainable way.

So that's something which make us price makes save tons of resources every year. We can't for the tons we take back and then we avoid that material to be use as primary resources. It's also having a very strong environmental impact. So it's some kind of a win win win if you wish for our customers, ourselves, and the environment. So that's it for me and Frederic to walk you through the overall journey and the focus on the CO2 commitments we took.

I'd like now to pass the ball over to Tina, who's going to cover the talent and DNI section of the discussion today. Tina?

Speaker 4

Thanks very much, Javier. Greetings to everyone and thank you for the opportunity to share some of the aspects of the diversity and angle inclusion strategy, especially as it relates to sustainability. My first slide, I think, is fairly straightforward But I want to emphasize that how we approach inclusion and diversity at Schneider is really about, comprehensive this way of embedding it into everything that we do. Starting with key messaging, of course, we've been very deliberate about ensuring that diversity and inclusion is positioned as a key enabler and a key partner in the sustainability story, but also as a topic in and of itself, when it comes to our way that we position ourselves in the market and the way that we support our employees in the workforce. For us and you've seen some of this evolution, especially we are approaching the 1 year, relaunch of our value proposition in our core of, messaging, they're also embedded in how we drive and wave the way we work.

On our employee value proposition, very much beyond meaningful purpose or in addition to meaningful purpose, emphasizing where we believe we differentiate in the marketplace is our very global, very inclusive way of working and are set up in terms of how we set up our workforce, which I'll cover shortly. As well as being very local, very agile in the marketplace to ensure our employees are empowered to do what they can do. And on the right hand side, and this has taken quite a bit of labor of love in terms of really trying to fine tune not only the language, of course, and why embrace different and building best team are part and parcel of what we expect all our employees and leaders to do but then, of course, bring that to life in the form of hardwiring it in certain core rituals, processes and policies, which I will cover. And finally, quick to say, just to build on Xavier's point, as we look at our employees today, across the globe and also as we keenly track the marketplace and potential employees in the future, sustainability and diversity and inclusion are 2 of the key, biggest traction factors and differentiators when we get the feedback and data, on how our employees and prospective employees view Schneider?

Now beyond, of course, the messaging, if you go to our strategy, I think it's fairly straightforward. The history, if I think about the last 10 years, has really been for us in our strategy shifting from a real focus on respect for differences to really pushing towards inclusion and equity to the point where how we view what we do in DNI is really always tested through the challenge of, are we and everything we do ensuring equity and fairness and in simple terms, an equal chance of success to all our employees, regardless of background, location, ethnicity, etcetera. Our strategy has 4 pillars. I think it's a fairly straightforward and how those 4 pillars connect with each other. The first one is really ensuring we support, and put extra laser effort on certain diversity starting with gender, nationality, generations, lgbt plus, and disabilities.

Those are not the only diversities, of course, that we look at, but at the group level, Those are five that are most pertinent and to remain to our employee base. The second, which in the following slides, I'll take a deeper dive on, is how we really bring our DNI strategy life by hardwiring it in the daily practices and policies. And this is very important because back to ensuring that all our employees have equity and chances of opportunity and success. The third is, probably the more elusive and often harder thing to do, which is shifting behaviors to ultimately shift mindset. And here, we have a robust program in terms of, education.

We've had all our ex com go through him via education, as well as Cassane down to our leaders and employees. And the last of course is advocacy. And Xavier spoke of our CEO and Chairman being in New York City this week, so climate week this afternoon. He's also attending with us a event with Seneca Women, one of the more most prominent global organizations on this topic of gender equity as a plenary speaker on the topic. I'm going to go in the next few slides on a few examples of where we believe our strategy in DNI comes to life and where it's, we believe is a differentiator.

The first one, and I know you are quite familiar with it, because as you understand our business model, what we call our multi hub model it's essentially, our way in thinking about managing a diverse and agile workforce globally to reflect our business model and to reflect the multi local way in which we work. Now we know that it's, not easy always to implement because we're looking at, all geographies across the world. But in short, where we were 15 years ago, where, 60% of our employee base was in Western Europe, and the vast majority of our leadership was in Paris headquarter. We are now continuing to work on and continue to shift towards a multi hub model where our people and our leaders are close to the markets in which they drive, mainly to be close to customer to be close to the talents that we attract and engage. And of course, agile, when it comes to driving innovation, responding to Mark or labor conditions.

So for us today, we are well on our journey to living that ambition of multi hub, Here, we highlight, of course, the key global locations of Hong Kong, Boston, and Paris, but we also track very closely other key satellite locations based on our business need as well as the geographies. One example in point, you all know well that today, a third of our revenue is coming from the Asia Pacific region. And of course, for us, We also have that same commencement representation of our employee base. And we have nearly 50% of our comments based in Asia, again, to reflect the importance of that market as one example. So multi hub is one very unique differentiator for us.

And beyond location and distribution of location, we track very close and we report on this twice a year with our comments, the internal pipelines as well. So not just location of jobs, are we ensuring that we're building local pipeline? The second piece for me, I want to share 2 highlights of policies and Frederick alluded to this earlier in his piece, but Global Family Leave, it's now in its 2nd year of deployment, is one example in how we approach DNI hardwiring into form of policies. So we announced this in 2018 or late 2017. With the notion of creating a policy that was not just restricted to maternity or paternity leave, but really to support our employees in all stages of their life where they need to have moments of leave support.

So the policy itself by design is very inclusive. The reach is very ambitious, inclusive, meaning we expect all our countries to implement the policy by 2020. And you can see here the 4 key standards of that in terms of 100% paid coverage for those 4 dimensions. And for us, we are well on track and excited to share that by 2019, we believe we'll be upwards of 90% of our workforce covered with this policy. And we are very confident that by 2020, we will just share our goal.

So this one is something that we also know has been a major engagement attraction lever, but also an engagement and retention driver for our employees. In terms of supporting their utilized. The other component on the next slide is another policy that we drive from the DNI angle. Which is about pay equity. And both of both pay equity and family leave, you can see again our structure, our cadence, if you will.

We tackle it at a comprehensive level, meaning all levels of our employees, all our countries. And in both cases, we set a global methodology, but of course allow for some flexibility at the country level based on statutory and market needs. So for Pay Equity, this has also been, a journey for the last couple of years. And for us, it is really about how do you create true equity in the way that we reward our men and women in the workforce. The ambition is fairly big.

And we believe that the premise on a simple statement of equal pay for equal work. So what we're trying to do in the pay equity approach is to effectively close any gaps, in most cases, in, it affects women. But actually, as we start to roll out in the countries, this policy and this approach, we've also uncovered cases of pay and equity, for men as well. In our approach, back to equal opportunities and equity for all is to look at it from both angles. Similar to family leaves, This is also part of our Schneider Sustainability Impact.

So we track this regularly. And for us, we are, again, on track for next year's target of covering the vast majority of our employees, with this pay equity process. So those are two examples I think that show, our commitment and our comprehensive nature in really working the hardwiring part of DNI. I'm a firm believer in driving mindset and culture change, but I'm also equally, cognizant in our, in our marketplace and with our global footprint, we need to create, systems and policies and rituals that also help support those types of behaviors. If we move on to the next piece, I want to give one example, at a more ground level because what I shared just now, we're 2 global that, of course, affect all our countries.

But I also want to share examples of as our DNI ambition and strategy come to life. A lot of the activity, a lot of the recognition, a lot of the impact is of course at our country level. So this year, earlier in the year, we were very, very proud to be announced a global winner of the Catalyst Award, which Catalyst has one of the leading global institutions supporting gender equality and they do a rigorous process of assessing various companies in their progress towards that aim. And Schneider was recognized specifically for its efforts in India. And you can see here, a few of the data points I won't go too much into detail, but I think what I love about this story is that, in India, for us and it continues to be a challenge, in terms of women representation in the overall workforce as well as in management and attrition this has always been a challenge for us and it's not so unique for companies that operate in that market, but for us, we knew that it really required a holistic approach to drive some major changes.

And with the strong support of our country president, Anil, the last couple of years, the country has really been making some market shifts in progress. And you can see here some of the highlights on the right in terms of women representation overall, the increase in a few percentage points. Overall, we have about 21% women in India. So admittedly, we still have room to grow to improve there. But through deliberate efforts around recruiting and retention, targeted training for our female employees at Schneider in India, as well as a unique program that really encourage male counterparts and male colleagues to act as allies and to participate and co build and co create, an equitable working experience.

We've been able to really change and shift the representation as well as the attrition rate. And really decrease the voluntary attrition rate. So that's one example at the country level I want to share for everyone on the call. Last two slides, again, it's really about sharing some of our broader commitments and recognitions that then relate to the external market. So everything we do, as I shared earlier, those global policies of course, we tie that to the SSI, the Schneider Sustainability impact that Frederick covered.

And of course, we also tracked them and audit them with an internal partner there. Part of what we do, in, in the area of gender equality is definitely, through you and women he for she. And we have been a pioneering corporate member, selected for our commitment and progress in that area for the last few years in the form of a he for shoe champion. And as a member, there's 10 other there's 10 of us in the corporate realm We are very clear and public about our commitments, and we each identify a few. And you can see here, Schneider's commitments in the areas of gender pay equity, hiring of women, and executive level of sponsorship and and championship.

And where we are today. I think for me, probably what's most important to highlight is our progress in gender pay equity, which I referred to earlier, And of course, on the right, our executive level championship, all the way from Jean Pascal to what we recently established which is a DNI board comprised of 14 senior executives in our company across different businesses, fifty-fifty gender parity, to champion. The women hiring 1, I think, remains, we continue to progress in that area. It continues to be not an easy thing to tackle, but we have, really increased the percentage of women that we've hired over the last 5, 10 years So we're around nearing 40% at entry. And today, as many of you know, we have, well represented gender at the board level.

And of course, over half of our P and L are led by our women in our XCOM in the areas of France, NAM, and Europe. So we are pleased with the progress at the top. And where I really want to make more progress, of course, is in our more senior management levels. Our ambition is to get to 30%. We're hovering around 22 these days.

So that's, to be transparent, a point of attention and priorities for us at the group level. And my last slide is more, a highlight slide in similar to sustainability. We take the recognitions that we receive in the market seriously. It's not just, at kind of a level communications, but also really, proud of some of the substance and impact we've achieved in the areas of DNI. And one of the things I think that's differentiates us if you go and look at some of these recognitions is what I shared at the very beginning vis a vis our strategy that when it comes to DNI, we really are trying to hardwire it in core programs and processes and rituals.

And not in the form of quotas, but really in the form of very, very stretched ambitions to drive the overall change that we seek. And here you have an example of of some of the global ones, but for me, I want to highlight, especially the local country ones, because there are many of them, and there are certainly for our local workforce is the most meaningful. And with that, I hand it back to Ahmed.

Speaker 5

Hi. I'm audience here from Investor Relations. So thank you Tina and all speakers for your input. Just before moving to the Q And A, I would just like to share with you all that of course, Investor Relations team remain available further discussion. If you have any questions, so you can reach either Donna or myself.

So you will see the email on the slide. And we make sure that you are in contact with our internal experts to answer all the questions you may have. So with that, we can move to the question and answer session. So you can either ask your question through the phone pressing star 1 or through the webcast. We have already received a question through the webcast, but before answering that, I would like to ask the operator if there is any question on the phone.

Speaker 4

You.

Speaker 5

Okay. Thank you. So we received one question, to address that year that CO2 emissions So I'm reading the question for everyone. So I was wondering what the share of this 13 net 0 carbon sleeves is in total building and if there are any already factories labeled at net 0. And for the question, how are the downstream avoided emissions calculated?

Speaker 3

On the first one, net 0 building, we have out of the 13, we have 10 factories, which are to the net 0. We have 2 distribution centers and 1 commercial office. And the number will keep on growing quarter after quarter and we'd be happy to report on that. So we one of the reasons why maybe we have more factories and offices in a factory is usually we are alone Schneider Electric. We are either a tenant or landlord, but we are fully able to implement the solutions, which we believe have to be implemented quickly with on-site solar and all the ecostructure microgrid systems, when we are a tenant in a commercial office, sometimes sharing floors with other tendons, it's not as straightforward.

Just want to remind that as we are globally already at 45% renew, which is D. Many of the sites are 80%, 70% but that list of 13 was just counting those ones which are 100%. So it's already 200,000 square meters, which is still a minority portion of our overall footprint, but we should become bigger. The second question on a quantification of CO2 tons for the customer, was it the 1? We may need more time, but to make it short, We look at the revenue of our company, 1,000,000,000 last year.

We look at the technologies in our portfolio, which are delivering proven energy and carbon efficiency. We look at the split between a brownfield sale, meaning our technologies, retrofitting, modernizing existing assets and greenfield. So we take away the take away take out the greenfield and we focus on the brownfield and then we go deeper to understand how much that Schneider Technology helped these assets be greener or energy efficient than before. All of this was documented with specialized engineers, 3rd party vetted and as assured by Ernst And Young, has provided assurance on the fact that our messaging was only as per the accepted standard for downstream scope 3 greenhangar calculations, but very rigorous and fairly, aggressively conservative. If you know what I mean, we just wanted to avoid counting any CO2 ton, which our technology will not be responsible for avoiding.

So we've been very, very cautious. And this being said, we still can claim that last year, 51,000,000 tons were avoided, and we see this number growing, year by the year ago, we sell those technologies, building management system variable speed drive, efficient transformers, services, renewable, consulting. All these services are Schneider are helping deliver that 61,000,000. I think there were other questions as well, Odie.

Speaker 5

Is Schneider also considering physical climate change risk? And if so, do you apply the same on your value chain approach, so on operations, suppliers and customers?

Speaker 3

So today we have a program where our 200 factories are screened by an independent risk consultant, which assess all the risks exposing our sites, including climate risks, flood risks, earthquake risks and all natural risks. So each of our sites has a screening and we make decisions, in terms of fencing, protecting any of those. Today, we don't see enough of our sites exposed to either sea level rise, which is which will be acute. So we have that lens. We have that for our critical suppliers, of course, we have the same third party company visiting the critical suppliers to exactly assess the same risk In addition to those risks, we also look at other risks can be transportation or operation continue to risk, but that of course It's more intensive upstream, if you know, why, you understand why with our suppliers and with our customers, But what we've seen overall is our factories are fairly agile when we rebalance lines of production from geography to another we can, we can say over some months, rebalance our production lines And we believe in case one of our sites was to be exposed to a significant risk, which is not the case today again.

Would be able to fence, but also move and relocate. Yes. And the last point in terms of focus, we want to as you've heard, ourselves be 0 carbon, but we just don't want to succeed alone. Our own footprint is less than 10% as you you know, of the entire end to end footprint, whether it's carbon or resource. So, of course, we want to succeed in that journey only in the condition we bring about our customers 1st and foremost.

So that's why the 51,000,000 tons were in innovation we unleashed last year to quantify that contribution to making our customers a solution to climate change of volumes. And as you've seen, we work with our suppliers to embark better materials, better suppliers to also make them be part of the overall ambition, which we have set for 2050. So, it's a bit short of an answer, but I know the time is limited. And we may have other questions.

Speaker 5

So we have received other questions. So how do you think about the growth of your competitors When you consider your environmental ecosystem, I train to move faster than your competitors or more in line with them. And I'm getting much pullback from your customers on your alignment progress. Can you remind us?

Speaker 3

So, quickly, of course, as an organization, we would refrain from bragging, I think we all are humble. I think our competitors and ourselves are fairly humble in the journey as Frederic mentioned, it's a journey. So, we look at our competitors, we look at our customers. So, of course, there are 3rd party agencies which do compare. CDP, you know, dojoints index.

So, they are liking to an equipped to compare companies from AllianceWither. What we see here in terms of speed We believe our company is a fairly broad in its willingness to change fast. At the commitment from this week from our CU confirmed that willingness to be faster. We intend to be much more focused on ourselves and our customers that rather looking laterally to our competitors, we tend to be willing to somehow spearhead the change be ourselves a 0 carbon company, bring about the customers And we are happy if the entire sector does the same, but we are more obsessed by maybe that line, if you wish, rather than lateral But as you know, our the ratings tend to position us fairly well against our competitors. You talk carbon commitment, but carbon performance You talk environment disclosure, you talk social performance.

As you have access to that data, you can also get your own perspective on how we fare with our competitors. The last one pushed back clearly not it's been an acceleration over the last 12 to 18 months been there in the past, but we see in actual web, they really bring the conversation if we don't bring it. Hey, how can you help me customer be more sustainable in my own operation. I want to win in the market to make green building the hot selling business for mine. So we are seen as an enabler for their success and no, they don't push back at all.

They pull, they need, have this discussion and And practically what that means, we sit down with customers and be an architecture for them to win, but win in their own operation, but win in markets. I have in mind examples in the oil and gas EPC and during procurement contract in the building space where those conversations are seen for them as strategic. So no pullback and a lot of pull actually. Even B2C, home and distribution business of Schneider, we see an appeal for greener offers in Nordics, Scandinavia, so California, some countries, Asia. So, across the b2b Metro customers, we see a pull and that's promising and that's what actually we are getting ready for.

So, I think the time is now getting to call getting to an end, Amodin.

Speaker 5

Thank you. Thank you, Xavier. So maybe, Annie, for your last two worlds.

Speaker 1

All right. Thanks to all of you and thanks all the participants for the time. I think you know, might take away from the questions also. I you know, as part of the Capital Markets Day, we had organized a visit to some of our smart factories, which some of you might have attended. I think my takeaway from this call is So maybe also to showcase in the future something, which is not just at the factory level, but more at the sort of the office level.

One thing that comes to mind just to share with everyone is our new sort of headquarters in Singapore. The regional headquarters. And about 2 years ago, we moved to this building, which was actually a pretty old building. It's a probably more than twenty five years old in industrial building. And within a couple of years, we have basically equipped it with all of our infrastructure, in offers and technologies, including with some, with some renewable energy microgrid as well.

And we are well on our way for it to be net 0 in a country, which, as you know, is not the most conducive because of the heat, but But maybe that's something that we can showcase to you guys in the future if you're interested. I'm quite keen to get some feedback just to be able to see whether this is of interest to you, whether we how often we do this kind of a call at the moment we're doing it once a year and a semiannual newsletter. But we'll probably send you a quick email today. So if you're can give some feedback, we'd appreciate that. And again, thanks for your time.

Thanks for your investment and have a good rest of the day.

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